In this case, the utilization of effective capacity for each operation represent
ID: 464648 • Letter: I
Question
In this case, the utilization of effective capacity for each operation represents the percent of maximum capacity each operation is actually expected to maintain for next month. For example, for next month, Operation B's effective capacity is expected to be 77 percent of its maximum capacity, 455 units (= 100 + 80 + 150 + 125). Thus, Operation B is expected to product 350.35 units per hour (= 455 units * 77 percent) next month. Operation's D effective capacity can be calculated in the same way: 308.125 units per hour (= 425 units * 72.5 percent).
The following table shows the company's overall production process information for next month.
For the company's overall production process next month:
1.Calculate maximum capacity. For this question, you need to take a look at the maximum capacity of each operation so that you can find the bottleneck in this process.
2.Calculate effective capacity. For this question, you need to take a look at the effective capacity of each operation so that you can find the bottleneck in this process.
Explanation / Answer
Operation B's maximum capacity = 100 + 80 + 150 + 125 = 455 units
Operation C's maximum capacity = 350 units
Operation D's maximum capacity = 190 + 235 = 425 units
Total Maximum capacity = Maximum capacity of A + Maximum capacity of B + Maximum capacity of C + Maximum capacity of D = 400 + 455+ 350 + 425 = 1,630 units
The bottleneck in this process is Operation C with lowest maximum capacity of 350 Units.
Operation B's effective capacity is 77 % of its maximum capacity = 455 * 77% = 350.35 units
Operation C's effective capacity is 95 % of its maximum capacity = 350 * 95% = 332.5 units
Operation D's effective capacity is 72.5% of its maximum capacity = 425 * 72.5% = 308.125 units
Total effective capacity = effective capacity of A + effective capacity of B + effective capacity of C+ effective capacity of D= 320 + 350.35 +332.5 + 308.125 = 1,311 units
The bottleneck in this process is Operation D with lowest effective capacity of 308.125 Units.
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